What Are Entitlement Programs?

An entitlement program establishes eligibility requirements and determines which individuals fitting those requirements are eligible to receive certain benefits. In the United States, Social Security and Medicare are the most well-known entitlement programs. These programs are provided by the government and offer personal financial benefits and government-supplied goods or services. A misconception associated with entitlement programs is the belief that the government simply gives money to program participants.

Entitlement programs are utilized by individuals, organizations, local governments and political parties. There are special entitlements provided through specific programs. At the federal level, examples of entitlement programs include Veteran Administration programs, Medicare, Social Security and Medicaid. Entitlement programs also include unemployment, agricultural price support programs, military retirement plans, and welfare programs, such as the federal Supplemental Nutritional Assistance Program (formerly known as food stamps).

Instead of receiving benefits, there are instances when individuals are required to contribute money to entitlement programs over a period of time. While employed, most people contribute money to Social Security and unemployment insurance, which grants them access to these programs. Medicare has similar elements that classify the program as an entitlement program. As of 2014, entitlement programs account for more than 50 percent of federal spending in the U.S. The creation of entitlement programs is significant and controversial from both a political and economic standpoint.